Unrecorded Revenue Accounting Definition

Meaning definition of unrecorded revenue.

Unrecorded revenue accounting definition. In order to consider these transactions as a profit an accountant must perform a line item adjustment to the balance sheet. Unrecorded revenue meaning revenue occurring in one period of accounting but recorded in another. For example if abc service co. This usually happens when the company has already provided the goods and services to its client but has not invoiced the customer yet.

This means that the following differences between unearned revenue and unre. The business typically records the revenue in a later accounting period which is a violation of the matching principle where revenues and related expenses are supposed to be recognized in the same accounting period. Unrecorded revenue is a sale that has been earned but for which no record has yet been made in a firm s accounting system. The amount is allocated as income but no payment has been made.

Home dictionary accounting unrecorded revenue. Definition of unrecorded revenue. Unearned revenue is revenue or income that has been earned by a company but not yet recorded in its financial statements. Receives 24 000 on december 31 2012 for a one year service agreement covering january 1 through december 31 2013 the entire 24 000 is unearned as of december 31 2012.

Accounting the amount is allocated as income but no payment has been made. The term is used in accrual accounting in which revenue is recognized only when. In financial accounting unearned revenue refers to amounts received prior to being earned. Unearned revenue sometimes referred to as deferred revenue is payment received by a company from its customers for products or services that will be delivered at some point in the future.

Unrecorded revenue is revenue that an entity has earned in an accounting period but which it does not record in that period.